How have minimum wage hikes in Massachusetts affected incomes?
Massachusetts has one of the highest minimum wages in the nation.
Boston — Massachusetts' lowest-paid workers saw their hourly compensation rise by more than 7 percent last year following a hike in the state's minimum wage, according to a report released on Labor Day.
A 2014 law raised the minimum wage from $8 an hour to $9 an hour on Jan. 1, 2015. Under the law, the minimum wage subsequently moved up to $10 an hour on Jan. 1 of this year and is scheduled to rise to a U.S.-leading $11 an hour at the beginning of next year.
There had been no increase in the state's minimum wage in the five years prior to the bill being passed by the Legislature and signed by then-Democratic Gov. Deval Patrick.
The average, inflation-adjusted hourly pay for the state's lowest-wage workers rose from $9.08 cents an hour to $9.74 cents an hour from 2014 to 2015, a 7.3 percent increase, according to the latest annual edition of "The State of Working Massachusetts." The report is compiled by the independent, liberal-leaning Massachusetts Budget and Policy Center.
Hourly wages earned by the average middle-class worker in Massachusetts also rose during that period, but by a smaller 2.9 percent rate, from $21.63 to $22.25.
"The wage growth we see among low-wage workers who are benefiting from the minimum wage increase reminds us of how important public policy can be in improving the economic well-being of working people and their families," said Noah Berger, president of MassBudget, in a statement accompanying the report.
Low- and middle-income workers are still far from overcoming decades of wage stagnation, the group was quick to add, and despite far lower unemployment many have yet to return to their level of earnings prior to the Great Recession.
One of nine Massachusetts residents lives below the federal poverty threshold, including more than 200,000 children, according to the most recent 2014 data. Overall and child poverty levels remain lower than the U.S. as a whole.
But the report also pointed to a continued strong state economy with the nation's highest median wage and best-educated workforce with nearly 50 percent holding college degrees.
MassBudget cited data from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics and other sources.
The federal minimum wage has not risen since 2009, when it was increased from $6.55 to $7.25 per hour. Twenty-nine states and Washington, D.C., have an hourly minimum wage above the federal rate. California and Massachusetts both raised their minimum wages to $10 an hour on January 1st, making them among the highest minimum wages in the country, as The Christian Science Montitor reported earlier this year:
Advocates for raising the minimum wage to $15 or even $20 an hour suggest that raising the minimum wage will bring more workers out of poverty and reduce their need to rely on government-assistance programs. That idea has gained momentum in recent years thanks to the nationwide 'Fight for 15' movement, which represents a wide variety of low-wage workers in fast food, retail, home care, and other industries. Detractors say that uniformly raising the minimum wage to $15 per hour would hurt employers in currently low-cost, low-wage states by forcing them to unfairly absorb the cost of paying workers more.